FUTURE ENTERPRISES 2017-18 Annual Report Analysis

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FUTURE ENTERPRISES 2017-18 Annual Report Analysis
Fri, 10 May

FUTURE ENTERPRISES has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

FUTURE ENTERPRISES Income Statement Analysis

  • Operating income during the year rose 13.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 18.3% YoY during the fiscal. Operating profit margins witnessed a fall and down at 23.0% in FY18 as against 22.1% in FY17.
  • Depreciation charges increased by 10.8% and finance costs increased by 10.7% YoY, respectively.
  • Other income declined by 22.7% YoY.
  • Net profit for the year declined by 27.5% YoY.
  • Net profit margins during the year declined from 1.2% in FY17 to 0.8% in FY18.

FUTURE ENTERPRISES Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 44,855 51,031 13.8%
Other income Rs m 2,371 1,832 -22.7%
Total Revenues Rs m 47,226 52,863 11.9%
Gross profit Rs m 9,935 11,750 18.3%
Depreciation Rs m 6,543 7,252 10.8%
Interest Rs m 5,218 5,778 10.7%
Profit before tax Rs m 545 553 1.4%
Tax Rs m 114 249 117.8%
Profit after tax Rs m 548 397 -27.5%
Gross profit margin % 22.1 23.0
Effective tax rate % 21.0 45.0
Net profit margin % 1.2 0.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



FUTURE ENTERPRISES Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 14 billion as compared to Rs 12 billion in FY17, thereby witnessing an increase of 20.8%.
  • Long-term debt stood at Rs 53 billion as compared to Rs 49 billion during FY17, a growth of 8.8%.
  • Current assets rose 7% and stood at Rs 28 billion, while fixed assets rose 14% and stood at Rs 73 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 115 billion as against Rs 105 billion during FY17, thereby witnessing a growth of 9%.

FUTURE ENTERPRISES Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 38,210 40,506 6.0
 
Current Liabilities Rs m 11,738 14,184 20.8
Long-term Debt Rs m 49,072 53,409 8.8
Total Liabilities Rs m 105,493 114,566 8.6
 
Current assets Rs m 26,287 28,190 7.2
Fixed Assets Rs m 64,379 73,441 14.1
Total Assets Rs m 105,493 114,566 8.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



FUTURE ENTERPRISES Cash Flow Statement Analysis

  • FUTURE ENTERPRISES's cash flow from operating activities (CFO) during FY18 stood at Rs 11 billion, an improvement of 14.2% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -12 billion, an improvement of 56.1% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 938 million, an improvement of 147% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs 187 million from the Rs 162 million net cash flows seen during FY17.

FUTURE ENTERPRISES Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 9,754 11,136 14.2%
Cash Flow from Investing Activities Rs m -7,617 -11,887 -
Cash Flow from Financing Activities Rs m -1,975 938 -
Net Cash Flow Rs m 162 187 15.1%
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for FUTURE ENTERPRISES

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 0.8, an decline from the EPS of Rs 1.2 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 33.5, stands at -150.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.5 times, while the price to sales ratio stands at 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 13.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 94.9 103.4
TTM Earnings per share Rs 1.2 0.8
Diluted earnings per share Rs 0.2 0.1
Price to Cash Flow x 2.3 13.8
TTM P/E ratio x -22.9 -150.8
Price / Book Value ratio x 1.1 0.5
Market Cap Rs m 15,840 104,086
Dividends per share (Unadj.) Rs 0.2 0.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for FUTURE ENTERPRISES

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 2.0x during FY18, from 2.2x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

    Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 1.1x during FY18, from 1.1x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

  • Profitability Ratios
  • Return on Equity (ROE): The ROE for the company declined and down at 1.0% during FY18, from 1.4% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 6.8% during FY18, from 6.7% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

    Return on Assets (ROA): The ROA of the company declined and down at 5.4% during FY18, from 5.5% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 2.2 2.0
Debtors’ Days Days 49 56
Interest coverage x 1.1 1.1
Debt to equity ratio x 1.3 1.3
Return on assets % 5.5 5.4
Return on equity % 1.4 1.0
Return on capital employed % 6.7 6.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



To see how FUTURE ENTERPRISES has performed over the last 5 years, please visit here.

FUTURE ENTERPRISES Share Price Performance

Over the last one year, FUTURE ENTERPRISES share price has moved up from Rs 39.5 to Rs 33.5, registering a loss of Rs 6.0 or around 15.2%.

Overall, the S&P BSE SENSEX is up 6.5% over the year.

(To know more, check out historical annual results for FUTURE ENTERPRISES and quarterly results for FUTURE ENTERPRISES)

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